The Gap, Inc. (GAP)

Operating return on assets (Operating ROA)

		Feb 3, 2024	Jan 28, 2023	Jan 29, 2022	Jan 30, 2021	Feb 1, 2020
Operating income	US$ in thousands	560,000	-69,000	810,000	-862,000	574,000
Total assets	US$ in thousands	11,044,000	11,386,000	12,761,000	13,769,000	13,679,000
Operating ROA		5.07%	-0.61%	6.35%	-6.26%	4.20%

February 3, 2024 calculation

Operating ROA = Operating income ÷ Total assets
= $560,000K ÷ $11,044,000K
= 5.07%

The Gap, Inc.'s operating return on assets (ROA) shows fluctuations over the five-year period analyzed. In the most recent fiscal year, as of February 3, 2024, the operating ROA improved significantly to 5.07%, indicating that the company generated $0.0507 in operating income for every $1 of assets. This positive trend is a notable improvement from the previous year's negative operating ROA of -0.61%, reflecting a turnaround in operational efficiency and profitability.

Looking back further, The Gap's performance in fiscal year 2022 stood out with a strong operating ROA of 6.35%, suggesting that the company efficiently utilized its assets to generate operating income. However, in fiscal year 2021, the operating ROA was significantly negative at -6.26%, signaling operational challenges and inefficiencies that impacted profitability.

In fiscal year 2020, The Gap, Inc. demonstrated a reasonably healthy operating ROA of 4.20%, indicating a moderate level of operational efficiency and asset utilization. Overall, the varying trends in operating ROA over the five-year period underscore the importance of consistent operational performance and asset management strategies for The Gap, Inc. to sustain profitability and long-term growth.